Shares of miners like NMDC, Tata Steel, Vedanta, Hindustan Zinc, and MOIL fell up to 5% on Wednesday after the Supreme Court allowed states to collect past dues on royalty on minerals-bearing land from Centre.
A nine-judge Constitution Bench of the Supreme Court on August 14 delivered a crucial judgment on tax on mining companies, ruling that states can collect previous dues on royalty and tax on mineral bearing land from April 1, 2005.
Shares of PSU National Mineral Development Corporation (NMDC) were among the worst hit and were trading over 5% lower at Rs 212 on NSE, while Tata Steel fell over 4%.
Metals and mining major Vedanta shares were down 2.5%, while Hindustan Zinc, MOIL, and MMTC were also trading 4% weaker.
Shares of Coal India, Orissa Minerals Development Company, and Ashapura Minechem were also under selling pressure as the move is seen as a big blow for mining operators.
Tata Steel, which fell sharply in August 14 trading, had said in its Fy25Q1 results that it has provisioned Rs 17,300 crore as contingent liability against claims by Odisha, should they are applied retrospectively.
In a post-earnings interaction with CNBC-TV18, the Hindalco management had said that they will not have any impact if the claims are implemented retrospectively. It is because there are no current pending claims, Hindalco had said.
Meanwhile, Rakesh Arora, Founder, goindiastocks.com, in an interaction with CNBC TV18, said that all companies with mining in states such as Odisha, Jharkhand and Tamil Nadu will be impacted. “For PSUs alone, the impact could be about Rs 60,000 crore,” Arora further said. He also said that Vedanta, India Cements and Ramco are likely to be impacted by the current order by the top court.
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